author

Wallace E. Oates

Replacing taxes on building structures with taxes on land-value results in more improvements to the land, measured as a higher capital-land ratio. Taxing land-values may distort the choice between earlier and later development of unused parcels of land in favor of projects that promise an earlier stream of revenue. This may distort efficient land use. The Pittsburgh experience affirms standard economic theory, predicting that a major increase in land value taxation should be neutral. That is, have little impact on development decisions. Land value taxation is unique in that it can raise tax revenue without raising the adverse fiscal incentives that other tax measures impose. The Pittsburgh City Council President stated: "I'm not going to say the land tax is the only reason a second renaissance occurred, but it's been a big help".
The Impact of Urban Land Taxation: The Pittsburgh Experience
Land Value Tax
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